Thought Leadership

Where the World of Procurement is Heading

Sammeli Sammalkorpi Jun 18, 2018

Having more data generated in the last 2 years than in history of mankind is an opportunity to recognize how analytics is a source for competitive advantage. Talking about procurement analytics is something that definitely makes my heart beat faster. As a co-founder of Sievo with years of experience and expertise in this domain, I got the privilege of sharing some of my insights in a lecture at London Business School’s course on Data Science. Engaging in great dialogues with the audience, the discussion sparked a lot of interest among the students, exposing them to a combination of theory and hands-on practice.

Here are some key points mentioned:

Analytics is not valuable unless it yields actions

As the world becomes more and more data-driven, many organizations rely on hard numbers to justify a decision or drive a strategy. It doesn’t really matter what type of company, nor what function, as everyone is doing it. Like the rest of the world, procurement has gone digital too, with the ultimate goal of unlocking savings opportunities that can lead to the organization’s endless possibilities of unleashing data value.

But this data value remains untapped if it does not yield any action. Capturing data from transactional sources is a key foundation, and translating this into actionable insights is the next rightful step. Integrating data-driven analytics effectively into procurement processes can defend decisions with greater precision. From forecasting consumption patterns to inbound logistics, applying analytics drives sustainable procurement value in the long term, streamlines purchasing operations and refines procurement strategies and processes.

Combining internal and external data

Most organizations have insufficient and inaccurate information about their spending patterns and supplier data. There is an overwhelming large global supply base and scattered data on supplier information, plus the disparate nature of systems and data sources. The challenge is in finding a way to combine the vast volumes of internal and external supplier information and use both to uncover more savings opportunities. Utilizing spend information with market prices and supplier risk information paves way to unlocking new insights. Combining internal and external data in an automated, structured fashion provides radical new source of procurement value.

The amount of human input in equation will gradually reduce

With machine learning and AI working hand in hand, more organizations embrace insight-driven actions rather than pure human decisions based on gut, emotion and self-interest. Procurement analytics provides the fuel for an organization to drive strategic and better sourcing decisions faster. Its future, with the effective collaboration of machine learning and predictive analytics provide opportunities of getting visibility and agility amplified. The days when the whole spend analytics engine is only in the able hands of human experts will soon be gone. Closing the data-to-action gap through decision automation means that less analytical capabilities are required from users.

It’s not just one method

Any business problem worth solving requires a combination of methods, some very traditional (ETL), and some just emerging (ML). Reaching effective, automated classification processes requires a combination of approaches. Analytics will move to cloud–and increasing number of domain-specific analytics solutions providing out-of-box integration to external data sources will emerge. This combination will be the secret weapons in the future. Technology is important, but more than that, is the ability to use it in a more innovative and collaborative fashion.


Any team looking to untap potential needs to possess three competences: rich data, domain expertise and advanced analytics. With the world going digital, new opportunities and digital technologies are sprouting for quicker wins, more efficient and smarter ways of operating. Procurement professionals are more empowered to deliver more business value. This is the future of procurement analytics. This is where the world of procurement is heading.





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